They can continue to extract massive profits from their existing market.
They can continue to extract massive profits from their existing market.
Considering Apple's success I'm inclined to say that disrupting yourself before anyone else has the chance to is the right long-term move, but I haven't studied the topic in enough detail to be sure.
In some ways I think they even helped keep the iPod concept alive longer by giving the impression that using a phone for an MP3 player was a compromise not a replacement. Yea, your phone can do this, but why waste the battery life?
Instead, Apple is making OS X behave more like iOS, reducing the differentiation and creating opportunities for the iPad to steal MB Air sales.
I believe they came at it from another way: if someone is going to eat at your sales (iPod), it might as well be you (iPhone). That's been Apple's mantra for a while.
And although anecdotal, most people I know with an iPhone (or Android smartphone) don't buy new iPods. And if they do, it's a lesser model (i.e. for excercise); not to the same value as before.